1.

2a: Types of Organizations

● Private/Public Sector Organizations
Quote of the day:
“I ain’t a businessman.
I’m a business, man.”
—Sean Carter (Jay-Z)
Rapper
Owner, 40/40 Club
Owner, Roc Nation Sports
Learning goal: Respond to the following
- Distinguish between private/public sector organizations
- What are the features of the private/public sector?

Success criteria: Tell the difference between

Private/Public sector organizations
Profit-based organizations

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All businesses:

- Provide goods or services

- Exchange goods or services for something of value

So what’s different?
Public vs Private
→ What’s the difference?

Use the SOAP method to Size

figure it out!
Ownership
Aims
Profit
 Size
How big is the organization?

Ownership
What is the structure of the organization?

Aims
What are the goals of this organization?

Profit
Is this organization profit-focused or not?

The SOAP acronym can help you identify the type of business you’re looking at
 • Size: Vary in size—they can be a small
business, or a multinational corporation

• Ownership: Owned by private individuals

or organizations

• Aim: Main aim is to make a profit*

Private Sector
Organizations • Profit = the difference between a firm’s
costs (money going out) and it’s revenues
(money coming in)

There are many different kinds of private

businesses—see Slide 15
 • Size: Can vary in size from small to large

• Ownership: Owned and controlled by the

government

• Aim: (Usually) provide goods and

services that cannot be provided by the
private sector, e.g. lending library, public
Public Sector health services, transportation
Organizations
• Profit: Profit is not always a priority,
service to public is. If profit is made, it
goes back to the government.

**Organizations that are fully owned by the

government are called public corporations
 Both! 51% Public, 49% Private
● Est.1997
● State-owned
telecommunications provider
● 29,500 employees
● CHF 2.131 billion
(USD 2.092 billion)

Private
● Est. 1926 (MB brand)
● Largest selling premium
brand (~2 million vehicles) in
the world
● Listed on 2 stock exchanges
○ Frankfurt / Stuttgart

Public or private?
 Group chart: Divide paper
into two halves

Task: Brainstorm! a) Private

b) Public
Organizations
(Private + Public)
List as many Private and
Public organizations as
you can.
Why do we need public sector
organizations?

• Protect citizens: police, courts

• Essential services: basic access to service
• Create employment: teachers, doctors, nurses)
• Prevent wasteful competition: post service/military
• Stabilize economy: ???
 When a business is moved from the
private sector to the public sector.

Example? (the most obvious one)

● Benefit

What is ● Cost
privatization?
In conclusion:
- Businesses can be owned by
some people (private) or the
people (public)
- Businesses can start off as
private, but then be made public
- Businesses can also start off as
public, then be privatized
- Businesses come in all shapes
and sizes
- One-person operation →
Gigantic, multinational
corporation with many
employees
For tonight...

Before you go:

- What’s something new you learned today? (completely new, or
extended your knowledge)
- What’s something that you want to know more about?

Read For your notebook:

1. Questions 1.2.1 (a) & (b) on page 15 of
your textbook
2. Handout 1.2: Focus on relevant
questions/definitions from each class

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